A crypto CEO who fabricated links to Disney, Pfizer, and Apple in order to shill $21 million worth of his own company’s token pleaded guilty to securities fraud last week.
54-year-old Michael Alan Stollery was CEO of cryptocurrency investment platform Titanium Blockchain Infrastructure Services (TBIS). The company advertised itself as a legit crypto investment opportunity and invited investors to purchase its BARS token in an initial coin offering (ICO).
However, the ICO was based almost entirely on lies with Stollery and TBIS inventing relationships with a number of big-name clients to add legitimacy.
Stollery made a point of namedropping these companies in interviews, listed them on TBIS’s website, and even went as far as to tweet out a chart packed with names and logos. Shortly after the ICO ended, a number of these firms contacted Stollery demanding he stop using their name. In his defense, he said, “I did not know that a procedure would need to have been followed, etc.”
Around this time, TBIS announced that 16 million BAR tokens had been stolen from its digital wallets “in a malicious act” and instructed trading platforms to stop BAR trading.
In response to the theft, TBIS created another token called TBAR which was designed to replace BAR on a 1:1 ratio, and announced that it would issue the new asset to all investors who had purchased the original BAR during the ICO.
Stollery also created fake company testimonials, adding them to TBIS’s website, and falsely claimed to have trademarked the phrases “Mining as a Service,” “The Ultimate Strength of the Blockchain…Unleashed,” and “Instant ICO Incubator.”
To top it off, the California resident failed to register the ICO and TBIS’s investment offering with the US Securities and Exchange Commission (SEC).
In an interview with the YouTube channel P2P Crypto, Stollery said: “These relationships are real. We’re in talks with McDonald’s, with Walt Disney, with Intel, with Verizon right now… We’ve got quite a client list.”
However, that was never the case. “This ICO was based on a social media marketing blitz that allegedly deceived investors with purely fictional claims of business prospects,” said the SEC Enforcement Division’s Cyber Unit in a 2018 statement (our emphasis).
Stollery spent the money raised in the ICO like it was his own, dipping into the $21 million pot to fund the upkeep of his Hawaiian apartment and make credit card payments totaling $50,000.
A lawyer representing Stollery claimed he had initially intended to run TBIS as a legitimate business but in the end, took it too far. Despite all this, his lawyer said, “He’s very remorseful and he wants to get as much money as possible back to those that put their money in,” (our emphasis).
The case was first brought to light in 2018 when a complaint against Stollery was made to the SEC. The ICO was halted, Stollery’s assets were frozen, and he was eventually charged earlier this month.
Stollery will be sentenced on November 18 and may face up to 20 years in prison.